Easy come, easy go: Abdullahs sell tower to pay back Damas debt

Source: The National 20 January 2010
Photo: Khan Tours website
================
The Abdullah family has sold one of its twin high-rise towers on Sheikh Zayed Road in Dubai to raise money to pay back part of the US$165 million (Dh606m) it owes shareholders of the jewellery giant Damas International for "unauthorised" investments.
The sale of the tower, to a private investor, marks the first efforts by family members to meet their debt payment schedule, which requires them to pay Dh200m by April this year. The unauthorised investments were made with company money.
The two 49-storey buildings were known as Angsana Hotel and Suites until late last year, when Damas Hotels cancelled its contract with Banyan Tree Hotel and Resorts. Banyan Tree said in a statement at the time that the building would be "converted to residential use" and sold.
Yesterday, a temporary sign hung outside one of the buildings, proclaiming the new name "Emirates Grand Hotel".
Staff in the building said the tower had been sold to an Emirati investor for an undisclosed sum in October last year and would reopen next month with Iberotel, a German hotel company, as the operator.
The second tower is still for sale.
"We just signed a contract last week," said Alaa Hanna, a sales director at the Iberotel Miramar Al Aqah Beach Resort in Fujairah. "It previously belonged to Damas International but it was sold because of all these problems."
Construction on the two towers started in 2004. The tower that became the suites section of the hotel was opened last year, while the second building, with 364 hotel rooms, did not open despite being scheduled for completion late last year.  A spokesman declined to comment yesterday but a source close to the company said this week that the family had begun liquidating assets to meet its obligations. The brothers have recently been promoting the sale of their largest yacht to raise more cash.
Prices of residential property in Dubai have fallen by more than 50 per cent since their peak in 2008, which could be an obstacle to liquidating the investments the family made with the proceeds from the Damas International
public share offering in 2008. Almost 70 per cent of the transactions were investments in the property sector, with about 90 per cent of those in the UAE.
Blair Hagkull, the head of the regional office for the property consultancy Jones Lang LaSalle, said yesterday the sale was among the only major transactions in Dubai in recent months.
"We are seeing a situation where cash-rich organisations are finding attractive deals in this market," Mr Hagkull said. "The market has been quiet, but there are many purchasers and potential investors that are waiting in the wings for the prices to get to the right levels."
The Abdullahs face the risk of losing control of their 103-year-old family jewellery business. The brothers signed an agreement on November 4 to pay back the amount of the unauthorised transactions within 18 months.
They have also pledged to return 350 million of their 515 million shares if they fail to pay Dh200m within six months, Dh400m within 12 months and the full amount within 18 months.  If they were to default on these payments back to Damas International  and the shares were taken back by the company, their holding in the firm would fall to 16 per cent, from 51 per cent.

Jail and fine for Dubai Lagoons' former CEO

Jail and fine for "A.M." the former CEO of Lagoons.  The Lagoon site languishes on the outskirts of Dubai surrounded by huge hordings that were once covered with colourful pictures of the proposed site and the lifestyle it offered.  Most of the large posters have now gone, removed by wind, sand and sun, while the tattered remains of others cling to the boards.
Source: Gulf News
Picture: Sama website
===============
The former CEO of Lagoons, a Sama Dubai project, faces three years in jail after the Dubai Appeals Court scrapped his acquittal of committing financial irregularities yesterday.
Presiding Judge Mustafa Al Shennawi on Tuesday convicted the 43-year-old Emirati former CEO, A.M., of abusing his duty as a public servant and accepting bribe. He will be jailed for three years and has been fined Dh2.89 million and ordered to repay the same amount (the bribe amount) to Lagoons.
The Appeals Court overturned A.M.'s primary judgment, who had been pronounced innocent by the Dubai Court of First Instance in July last year.
Al Shennawi also sentenced Lagoon's former executives, 42-year-old Emirati M.M., his 23-year-old compatriot N.Q. and 28-year-old M.S. (who doesn't carry documents), to three years in jail each. They were also slapped a joint fine of Dh4.8 million and ordered to repay the amount to Lagoons.
M.M., Lagoon's former sales manager, M.S., the ex-sales executive, and Damac's former property development director, 32-year-old Syrian, A.H., will each spend a year in jail after the court convicted them of exchanging bribe worth Dh650,000. The Appeals Court ordered slapped them a joint fine of Dh650,000. Al Shennawi acquitted A.H. of aiding and abetting M.A. and M.S. collect a bribe worth Dh2.3 million over a three-land deal.
Moreover, the appeals court confirmed the acquittal of M.A. and N.Q. of revealing the company's secrets by providing an investment house with details about their clients, as well as information and prices of properties owned by Sama Dubai.
Defence lawyers are expected to appeal yesterday's judgment before the Cassation Court within 30 days.
At an earlier hearing, a prosecutor submitted an official letter stating that the funds of Sama Dubai are public and informed the Dubai Appeals Court that five executives of the company charged with financial irregularities are in fact public servants.
"We received an official letter from the Financial Control Department [FCD] at the Rulers Court confirming that the funds of Sama Dubai and Lagoons are public and that their employees are public servants," said the Public Prosecution's representative when he handed FCD's letter to Al Shennawi.
The five executives had earlier pleaded not guilty and refuted their charges.
According to the charges sheet, prosecutors had charged M.A., N.Q. and M.S. with taking Dh4.8 million in bribe against unlawfully selling/reselling lands belonging to Sama Dubai.
Lagoons' former CEO was charged with breaching his duties by requesting from one of his company's clients, five apartments worth Dh2.7 million and a cash sum of Dh200,000 in bribe against failing to preserve the rights of Sama Dubai and causing it to incur a loss of Dh137 million.
Charge
The Public Prosecution charged A.M. with preventing Sama Dubai from gaining a Dh4.6 million in ownership transfer fees.
A.H. was accused of accepting Dh650,000 in bribes from M.A. and M.S. and aiding and abetting them. M.A. and M.S. were charged with aiding and abetting A.H. in committing the bribe crime.
An Egyptian financial controller, from Dubai Government's Financial Control Department, testified that A.M., when he was Lagoons' former chief executive, should have preserved the company's rights and increased its earnings. "He caused Sama Dubai to incur a purported loss of Dh137 million," claimed the Egyptian.
An Emirati senior executive from Sama Dubai testified that A.M. failed to take the proper action against the company which was late in paying the instalments of certain properties.

Istithmar manager on the run

More on yesterday's story: "CT", Chris Turner, has contacted the National newspaper in Abu Dhabi and confirmed that he is now in the UK. He declares his innocence and is considering further legal action in a UK court.

Istithmar expat manager jailed for five years in Dubai

A British senior manager at the overseas investment arm of Dubai World has been jailed for embezzlement. A former senior manager at Istithmar World, the overseas investment arm of Dubai World, has been handed the longest prison sentence yet as part of a major crackdown on corruption.
The British manager, referred in court as CT, jailed for five years and ordered to pay almost AED10m ($2.7m) in fines after being found guilty of embezzling $1.34m, it was reported on Wednesday.
CT was accused of purchasing stocks for Istithmar from a British horse brokerage company that he owned, then pocketing a portion of the funds, UAE daily The National reported.
Judge El Saeed Bargouth ordered CT to repay the $1.3m and fined him the same amount. He further ordered that CT be dismissed from his position, the paper said
CT has two weeks to lodge an appeal. In the meantime he will be in custody at Al Awir Central Jail.
Meanwhile, appeals judges in the Sama Dubai fraud case were considering whether employees of state-funded companies could be tried as public officials.
If they rule that they can, it would leave the defendants in a number of corruption cases open to markedly heavier sentences if found guilty, the paper added.

Dubai Properties chairman arrested.

Source: Bloomberg
Photo: Dubai Properties website
============
Hashim Al Dabal, chairman of Dubai Properties LLC has been arrested on suspicion of embezzlement at the state-owned company that’s in merger talks with Emaar Properties PJSC, the emirate’s attorney general said.
“Mr. Al Dabal is accused of abusing his position and earning millions in illegal profit,” Attorney General Essam Essa al-Humaidan said in a phone interview today. “We are questioning him almost daily and Mr. Al Dabal indicated he is ready to answer questions without having a lawyer present.”
Emaar, the United Arab Emirates’ biggest real-estate developer, said last week that talks are progressing on a merger with Dubai Properties and state-controlled Sama Dubai LLC and Tatweer LLC. Authorities in Dubai have arrested officials at property companies since beginning an investigation into corruption last year. They include Deyaar Development PJSC’s former CEO, Zack Shahin, and Adel al-Shirawi, former chief of mortgage lender Tamweel PJSC.
“This clearly creates a distraction for the planned merger,” Saud Masud, a Dubai-based analyst at UBS, said by telephone. “It also raises questions on the need for more due diligence beyond the financials for Emaar and it may end up becoming a catalyst for a management reshuffle.”
Bloomberg calls to Dubai Properties seeking comment weren’t answered today, a weekend day in the United Arab Emirates. Al Dabal hasn’t appointed a lawyer and only family and legal representatives are allowed to talk with him, al-Humaidan said.
Investigation Continues
Al Dabal was arrested about 10 days ago, the attorney general said. No arraignment date has been set and the investigation is continuing, he said. Under Dubai law, he can be held for 21 days, after which he must appear before a judge.
Dubai Properties is a unit of Dubai Holding LLC, a group owned by the emirate’s ruler, Sheikh Mohammed Bin RashidAl Maktoum. In August, Al Dabal was appointed as executive chairman at Dubai Holding’s newly created Property Vertical unit.
The proposed merger with Emaar is aimed at controlling the supply of new buildings amid a glut of homes that drove property prices in Dubai 50 percent lower. The combined entity will have 13.4 billion dirhams of debt and 194 billion dirhams of assets, Emaar said on Oct. 22.
Dubai Properties built Jumeirah Beach Residence, a 1.7- kilometer (1.05-mile) waterfront development that includes 36 residential towers, four hotels and retail space.
In Custody
Al Dabal is being held at a detention center in Dubai police headquarter, al-Humaidan said.
“We’re still trying to determine the extent of Al Dabal’s misconduct,” he said. “When the investigation is complete, all details will be announced.”
The investigation is being “conducted swiftly and, God willing, it will be concluded soon,” he said, adding that Al Dabal will be allowed to meet with a lawyer as soon as he appoints one and his family is allowed to visit him.
Emarat Al youm reported earlier today that Al Dabl had been referred for prosecution on suspicion of financial misconduct. It cited Yasir Amerey, the head of the financial supervision department at the Ruler’s Court.
Dubai Holding appointed Ahmad bin Byat as acting chairman, Zawya Dow Jones reported yesterday, citing the company.
“Dubai Holding and all of its business entities are committed to the highest levels of corporate governance. As such we fully support the Dubai government’s initiatives to uphold these standards,” Zawya Dow Jones cited the company as saying in a statement.

Aussie businessmen granted bail after 9 months in Dubai jail

Source: Sydney Morning Herald 21 Oct 09 
==============================
Two Australian businessmen have been granted bail after languishing in a Dubai jail for nine months on suspicion of fraud.
Melbourne man Matt Joyce, 43, and his colleague Marcus Lee, 40, of Sydney, were arrested in January after working for three years for the Nakheel company's multi-billion dollar Dubai Waterfront development.
Their arrests came as the global financial crisis hit the local property market hard.
The pair were held in jail for six months before charges of misappropriation were laid.
Last month an independent judge finally assessed their applications and granted an application to hear their case.
Joyce's Australian lawyer Martin Amad said his client was due to be released from prison in the next few days while Lee is also due for release shortly.
The co-accused will be required to hand in their passports once released ahead of the first witness appearance on November 17.
Legal processes in Dubai are primarily controlled by the prosecution, Mr Amad said.
"There's no time limit as to which a prosecutor needs to provide a file," he told AAP.
Joyce will spend time with his wife and three children before concentrating on preparing his defence with his local legal representative.
"We've got confidence he'll be found innocent.
"His wife is over the moon and can't wait to have him back in the home."

Damas CEO quits over $165m 'unauthorised payments'

Source: ArabianBusiness.com 12 October 2009
Photo: Damas website
=============================================
The managing director and CEO of UAE jewellery retailer Damas International on Monday left the company after admitting to being responsible for unauthorised payments worth up to $165m, the company said in a statement.
Following Sunday’s voluntary suspension of trading by Damas on Nasdaq Dubai, the company announced that it has accepted Tawhid Abdulla’s resignation.
The luxury retailer said in a statement that he had stepped down "due to his disclosure to the Board of what is understood to be unauthorised transactions conducted by him".
The statement added that the full extent of the transactions had not yet been calculated but the company’s initial estimate was that they could amount to about $165m.
The Abdulla brothers, who are founding members and current owners of more than 50 percent of the company's shares, "fully stand behind the company", the statement said.
"They have agreed to commit the necessary assets to secure and repay in full any unauthorised transactions," the statement added.
A special committee of the Board is to appoint an independent global accountancy firm to conduct an independent review and an international law firm to assist in analysis of the transactions.
The Board has appointed Hisham Ashour as CEO of the company effective from Sunday. Tawfique Abdulla will continue to serve as chairman of the Board and has also assumed day-to-day responsibilities as managing director.
The company also said it had adequate funds to meet its current financial obligations and was continuing to conduct business as usual.
"The Board remains fully committed to the highest standards of corporate governance, and has implemented procedures to ensure that the repayment is conducted in an appropriate and timely manner and that all transactions are fully scrutinized in the future to prevent a recurrence," the statement added.
Damas, a family-owned jewellery group with origins going back to 1907, raised $270m in an initial public offering on the Dubai International Financial Exchange, NasdaqDubai’s predecessor, in July 2008, in one of the largest privatisations of a family-owned business in the Gulf.
One of Dubai’s best-known brand names and a leading member of the city’s jewellery and precious metals industry, Damas has more than 500 stores across the world.

Six jailed for illegal DVD sales in Dubai

Hmmm, maybe this is why the Chinese Video Lady (everyone in Dubai has one...) hasn't been round for a few weeks.

Source: ArabianBusiness.com 12 October 09
Photo: Fotosearch Footage

===================================

Six people have been jailed after being caught selling parallel imports of DVDs.Six foreigners trading in the UAE have been jailed after being convicted of engaging in parallel imports, the practice of goods without the permission of the intellectual property owner.

Dubai Courts handed down the sentence which is the first ever imprisonment related to the sale of "grey" products in the Middle East, the Ministry of Economy said in a statement on Monday.
The ruling followed a raid by authorities against a major parallel importer in Dubai, which led to the confiscation of thousands of DVDs containing banned titles, Ministry chiefs added.
Six people including the shop manager were arrested, with the manager sentenced to two months in prison, a fine of AED20,000 and deportation. The name of the shop was not released.
A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey products, and are implicated in issues of international trade, and intellectual property.
Mohammed Ahmed Bin Abdulaziz Alshihhi, general manager of the UAE Ministry of Economy, said: "Our overriding objective is to improve the competitiveness of the UAE market while ensuring that the interests of the intellectual property rights owners are protected.
"While this landmark court ruling has underlined the UAE's position as the safest business hub in the Middle East, it also reflects the country's stringent stance on piracy."
He said the country would continue its "relentless efforts" to protect property rights, including steps taken to confiscate counterfeit products and levy criminal charges on violators.
"The result...serves as a strong precedent against parallel imports which we can expect to further reduce this type of IPR crime," added Scott Butler, CEO, Arabian Anti-Piracy Alliance.

Dubai i-mate 'fraud' will run to $15m

i-mate founder Jim Morrison in happier days

Source: ArabianBusiness.com
===========
An alleged fraud which has been blamed for the collapse of UAE-based smartphone maker i-mate’s Dubai business operation will run to about $15m, CEO Jim Morrison said on Monday.
“This is the first time I have ever wanted to murder someone. Eight years of my life I put into this. Personally I have lost about $6m, cash,” Morrison told Arabian Business in a phone interview.
Morrison, who left Dubai for the UK last Thursday, claimed a board member was to blame for the company's demise but added that no i-mate employee has been formally charged with fraud.
All 40 of i-mate’s employees in Dubai – the company’s headquarters – will now lose their jobs, he said.
Earlier this month they were told to take two months unpaid leave.
Morrison said the alleged fraud was committed after he left Dubai to work in the United States in March to be closer to both Microsoft and the US military, whom he said were interested in a new product being developed by i-mate.
Asked if he had any contact with the former employee he blames for the firm's downfall, Morrison said: “Not except for him greetin (crying) on the phone and pleading that I don’t put him in jail. Apart from that, no.”
i-mate, which had 120 staff around the world, has been hit over recent years by both the global economic downturn and the arrival onto the market of the iPhone and Blackberry devices.
Three years ago, Morrison said, the company sold 200,000 handsets a year in the Middle East.
“This year we would have been lucky if we had done 40,000,” he added.
However, he denied the company’s closure was inevitable irrespective of the alleged fraud.
“You could say the company is worth nothing now. At its height, three years ago, it was worth $750m. I would say the downturn had nothing to do with our failure. It’s quite simple, if you know you’ve got no cash in Dubai, then you’ve got a very limited period in which to get cash. And if you don’t, all of your creditors come knocking on the door and that is it,” Morrison said.
“If I had the cash, or I had another month or two months to get the cash, I would have been ok. So it is not to do with the recession, because we had corrected from the recession,” he added.
As a result of the alleged fraud, Morrison said, i-mate fell behind in its obligation to pay its staff their salaries on time. He added that as a result, many members of staff had their bank accounts frozen and at least two were arrested for non-payment of loans.
He claimed i-mate’s salary commitments could have been met if money paid to the company by electronic goods retailer Sharaf DG had not been taken as “ransom” by disgruntled employees.
“What happened is we sold products to Sharaf DG, and we had AED2.6m coming in, which more than covered the salaries, but it was coming in a week late, and that is what kicked it all off...The sales guys who were responsible for Sharaf DG went and collected the cheques and then held them out to ransom, saying ‘paying me all my money and my gratuities and everything and I will give you your cheques,’ which of course we couldn’t do.
"So now the money is all locked up in court, because we have to do court action to get new cheques issued, and cheques cancelled and whatnot.”
Asked if i-mate would reopen, Morrison said it would not, adding that once the company had been legally wound down he would look to open a new company in Dubai. He said he did not expect to get the money back he alleges i-mate has been defrauded of.
“If Dubai wasn’t set up in such a way that the banks are so aggressive and put people in jail, and your only defence is a court case, the Dubai office would have come through this ok. There’s no protection. I even spoke to the banks, and I asked why they are like this, and they said it is because so many people just leave the country, so as soon as they get an indication of it they have to act or they’ll lose a fortune.
"It is well-publicised that people drive to the airport and just leave,” he said, adding that he was still free to come and go from Dubai as he pleased.

i-mate closes in Dubai due to "major fraud"

Source: ArabianBusiness.com
================
The CEO of smart phone maker i-mate on Wednesday spoke out over the company's troubles in Dubai and insisted that the business and brand will continue to live on.
Employees at i-mate's Dubai operation were made aware of the company's financial plight earlier this month.
They were initially told to take compulsory unpaid leave, but last week i-mate's office in Dubai Internet City was closed and phones went unanswered.
Jim Morrison, who founded the device maker eight years ago, said the company had run into difficulties after uncovering a "major fraud" committed by a senior employee within the organisation.
Morrison said the fraud was discovered at the end of August and the case is now with the police.
"This all happened just before we were launching [a new device range]. We produced all the paperwork, we have the devices and so we have to sort this problem first," added Morrison.
He said the company was still committed to launching its new range of smart phone products and would offer new contracts to retailers if required.
Morrison said the situation had made it difficult for i-mate to pay staff on time and led to around 30 of its 40-strong workforce being laid off.
It is understood that some former employees are considering raising their dispute with local authorities, which Morrison admits would make it difficult for the company to do anything with its Dubai operation for now.
However, he insists that "everything about i-mate will continue".
He said: "We are keeping the brand, we are putting out products, and we will be looking for more funding of course. There is a lot of good stuff happening."
Morrison, who is currently in the UAE but is normally based in the US, said that it was still too early to say if the office in Dubai would eventually re-open.
However, he said the company still continues to operate in other markets around the world and would seek to maintain customer relationships in the region even if it meant serving the market from elsewhere.
i-mate is preparing to release a statement with further details this afternoon.

Aussies refused bail in Dubai Court hearing

The 'Gulf News' uses initials for defendants' names in their reports.
Source: Gulf News 15 Sept 09
==============
Waterfront's former executive director and ex-operations manager were refused bail by a court yesterday after they denied the charge of unlawfully gaining Dh44.1 million.
With his arms folded, the 43-year-old Australian former executive director, M.J., repeatedly said: "No!" four straight times when he pleaded not guilty before the Dubai Court of First Instance.
His 40-year-old compatriot ex-operations manager, M.R., said: "No!" four times in the same manner when he denied his charges at courtroom nine in front of Presiding Judge Al Saeed Mohammad Barghout.
Lawyers Salem Al Sha'ali and Ali Abdullah Al Shamsi, who are defending M.J. and M.R., respectively, told the judge that there are no more reasons to keep their clients in provisional detention.
The advocates said their clients' passports have been confiscated and asked the judge to bail the defendants.
The Public Prosecution charged M.J., M.R. and Waterfront's former legal adviser, 44-year-old Australian A.J. (who is at large), with abusing their jobs as public servants and intentionally damaging the interest of Nakheel's Waterfront project by unlawfully earning Dh44.1 million, out of which Dh22.1 million went to M.J.
According to the bill of impeachment, a fourth Australian escapee, identified as A.R., collaborated with the former Waterfront executives.
Prosecutors charged M.J., M.R. and A.J. with abusing their jobs when they managed and promoted Dubai Waterfront lands for sale and gained an illegitimate profit.
Public Prosecution records claim the Australians swindled and misappropriated Dh44.1 million from a Dubai-based property developer.
The defendants allegedly claimed to the developer's Australian manager, D.B., that one of the lands at the Waterfront project belonged to an Australia-based company, which is owned by A.R. The defendants claimed that the land had been reserved for A.R.'s company. Prosecutors claimed that the defendants deceived D.B. and lured him into paying Dh44.1 million and obtain a waiver over the ownership of the land to be able to buy it.
During yesterday's hearing, advocate Eisa Bin Haidar represented the property developer and D.B., who is claiming Dh20,000 in temporary compensation.
Al Sha'ali argued in court: "Since this case surfaced nine months ago, we submitted a document that confirms that the defendants reserved the land for the Australia-based company. Prosecutors failed to face prosecution witnesses with that document because eventually it corroborates that the suspects didn't have any criminal intention&"
Presiding Judge Barghout rejected the bail requests and adjourned the case until October 22.

Sunland claims Dubai developer sought $38m kickback

From The Australian 11 August 09
=============================
The Packer family-backed property company Sunland has claimed that a Melbourne developer and his old school mate from Geelong Grammar conspired to defraud the company in a complex transaction on the Dubai waterfront in 2007.
Documents filed yesterday in the Queensland registry of the Federal Court give details of a case involving Australians Matt Joyce and Marcus Lee, who were employed in 2007 on the Dubai Waterfront project, and Melbourne-based property developer Angus Reed, who went to Geelong Grammar with Mr Joyce.
The documents allege that Mr Joyce and Mr Reed, who were well-known to each other, failed to give any indication of this relationship to Sunland's representative in Dubai, David Brown, when he was negotiating to buy land in the Dubai Waterfront, then one of the world's most expensive projects.
The documents claim that Mr Joyce had told Mr Brown that Mr Reed had purchased a valuable piece of waterfront land and that Sunland had paid Mr Reed over $14 million for the right to buy the land, even though Mr Reed had never actually owned it or had rights to buy it.
They claim that in mid-2007 Mr Brown had asked Mr Joyce if there was any waterfront land left in Dubai, and a representative of Dubai Waterfront told him that an existing block was being reconfigured to create a new block, D17, which would have water views.
In August 2007, Mr Joyce allegedly told Mr Brown that Reed had already bought D17, and had secured it at $50 per square foot, well below the going rate in the area, which was around $57.
Mr Joyce gave Mr Brown the contact numbers of Mr Reed, who claimed that he was in the process of purchasing the land, but was willing to enter an agreement with Sunland to develop it.
Mr Brown allegedly received further phone calls from Joyce urging him to move quickly or the land could be purchased by "the Russians" for a considerably higher price. In September 2007, Mr Lee, a project manager at Dubai Waterfront, and lawyer Anthony Brearley from Dubai Waterfront, phoned Mr Brown to say they were concerned that "marketing people will sell plot D17 and we will have no control over this".
But Mr Reed and Sunland were unable to come to terms on purchasing the land, so Sunland offered to purchase Reed's company's rights to D17 for $6.5 million, plus the difference in property value for the area between the going rate and the price Reed was able to negotiate, a total of $14.3m.
But the documents also claim that in December of that year, Sunland's Mr Brown was told by officials from the Emirates audit office that Mr Reed had never purchased the property in question, and there had been no reason why Sunland could not have purchased the property in their own right.
The documents allege that if Mr Joyce and Mr Reed -- who failed to tell Mr Brown of their relationship -- had not made the representations, then Mr Brown would not have entered into negotiations with Mr Reed, and instead would have negotiated directly with Mr Joyce for the purchase of D17.
It also alleges that "Joyce and Reed both knew that their representations were false, or were reckless as to their truth or falsity".
Mr Reed has skipped the country and is in Melbourne, while Mr Joyce and Mr Lee, who is from Sydney, have both been kept in detention in Dubai for the past year.
Gold Coast-based Sunland has James Packer on the board, but has taken a beating in its Middle East property deals as the market has dived.

Fingered!

From 1 August all UAE expat residents must provide finger prints when they renew their residence visas. UAE residence visas must be renewed every 3 years if you remain with the same employer or on each occasion you change your job. Residents of Dubai already provide the following:

- facial and biometric data on passports;
- palm and side of palm prints for the Emirates ID card (with a fee to pay);
- thumb prints for UAE e-gate cards (with a fee to pay);
- retina scans at airports and some land borders (oh, that's free);
- a blood sample every three years as part of the visa renewal process.

That information is apparently insufficient.

In the article below, Mr Al Minhali says that the fingerprints will be checked "...to make sure they have no criminal record." I wonder which databases the fingerprints are checked against? Only the UAE? Or is there an open international database the UAE authorities have access to?

Article source: ArabianBusiness.com
=================================

People applying for a residency visa in the UAE will be required to give their fingerprints under stricter efforts to prevent fraud and identity theft, officials said.
In a report by Gulf News, Nasser Al Awadi Al Minhali, acting director general of the Federal Naturalisation and Residency Department, said applicants will be required to give their fingerprints to make sure they have no criminal record.
"Starting next month, applicants for residence visa will be fingerprinted under a tighter biometric system to provide more secure identification and prevent fraud," he told the paper.
"Those found to be with criminal records will be denied visa and handed over to the police for further legal action," he said.
"The move will eventually cover all residents in the country, including workers sponsored by their employers, investors, domestic workers and parents of residents," Al Minhali said. Residents living in the country will be fingerprinted when they apply for renewal of their visa. It is not yet known how much this will cost, but Al Minhali said the fee would be nominal.
A fingerprint database will be set up in Naturalisation and Residency departments across the UAE to ensure only those with "good conduct" or "lack of a criminal record" will be granted residence visa, the paper said.

Packer-backed developer to sue Dubai pair

THE James Packer-backed Gold Coast developer Sunland Group has complained to police and the corporate watchdog about two Australians accused of fraud in Dubai, and is expected to take civil action against the men to recover losses from their alleged crime.
Sunland, in which Mr Packer is a key shareholder and non-executive director, has laid the complaints against Matthew Joyce and Marcus Lee, executives from the colossal Dubai Waterfront project. The two have been charged with fraud after being jailed for six months on suspicion of bribery.
The pair insist they are innocent and Australian business sources have complained they became scapegoats amid the bursting of the property bubble in Dubai, where "commissions" or kickbacks are commonplace.
But now Sunland, which has billions at stake in Dubai, has made a formal complaint about Joyce and Lee to Queensland Police and the Australian Competition and Consumer Commission.
In a media release yesterday, the day after the fraud charges were revealed, the company said: "Sunland understands that the charges relate, at least in part, to the purchase by one of its subsidiaries of a site from the Dubai Government-owned master developer Nakheel (Dubai Waterfront LLC), at Dubai Waterfront in October 2007."
It is understood that Sunland paid commissions to Dubai Waterfront, where Joyce was managing director and steering the world's biggest waterfront development.
Sunland's managing director Sahba Abedian said the company had been assisting Dubai authorities with their investigations since December 2008 and would continue to provide help when required. The company said it did not instigate the investigation into the executives.
Mr Abedian said: "Sunland has also taken steps to report the actions of certain individuals to the Australian authorities and we are investigating civil remedies in respect of the alleged fraud."
The statement did not name Joyce or Lee, but the company has confirmed that its complaint and action were against the executives, not Dubai Waterfront or Nakheel.
It is believed that any civil action will be launched in Australia, not Dubai.
Mr Abedian confirmed that Dubai authorities had returned the passport of David Brown, the Sunland's chief operating officer in the Emirates, now that the they had completed their investigation. He said Mr Brown was a witness and not a subject of investigation.
Joyce's lawyer, Matin Amad, said he was shocked by Sunland's action.
"No complaint about Joyce or Lee has been brought to my attention," he said yesterday afternoon. "I can't imagine any circumstances under which a complaint could be justified. The alleged offence occurred in Dubai, not in Australia. It sounds like they have an ulterior motive in doing this."
Mr Amad said the case against Joyce and Lee is weak. Joyce's wife and three children and Lee's wife are in Dubai, awaiting the outcome of their fraud trial.
Sunland said it only released the information now as it had not wanted to interfere with the Dubai investigation.
====================
Source: The Age, Melbourne 22 July 2009

Seven charged over alleged $501m Dubai fraud

From the Financial Times 9th March '09

Dubai's public prosecution has charged seven businessmen with crimes related to an alleged scheme to defraud Dubai Islamic Bank of $501m, official records show.

The bill of indictment, seen by the Financial Times, alleges the crimes were committed between 2004 and 2007 by two former employees of the bank and five businessmen linked to trade finance company CCH and a real estate project in Dubai, the Plantation.

The case, expected to go to court soon, is likely to become a high-profile test for the emirate's judicial system as questions swirl about the rule of law in the Gulf's commercial centre, hit hard by the global financial crisis.

The move, after an investigation of more than a year, lays the ground for the long-awaited conclusion of the DIB fraud case, central to a broader clean-up at state-linked companies, including DIB's real estate arm Deyaar.

International censure has mounted against the government's decision to hold without charge some executives for almost a year. Zack Shahin, former chief executive of Deyaar, has via US lawyers complained about his extended detention, claiming he had been tortured and was being victimised to protect senior locals.

The Dubai authorities countered saying the investigations have been carried out according to United Arab Emirates law.

The public prosecution document accuses Charles Ridley and Ryan Cornelius, both Britons, and Erin Nil, a Turk, of forging documents to defraud the bank of $501m via CCH, a trade finance company owned by Mr Nil and linked to Messrs Ridley and Cornelius.

The document alleges that the two former DIB executives, Rafatul Islam Usmani and Omair Mooraj, both Pakistanis, solicited and received bribes of $950,000 and $750,000, respectively, to facilitate the alleged embezzlement. The public prosecution document also claims that Zia Usmani, a US citizen, defrauded DIB of $2m.

Arthur Fitzwilliam, the British developer behind the polo-themed Plantation, is accused by the prosecution of aiding Messrs Nil, Ridley and Cornelius to carry out their alleged fraud. Mr Mooraj, who was working for JPMorgan when he was detained last year, is represented by Habib al-Mulla, who said: "We deny the accusations as matter of fact and law. We are going to defend him vigorously with all legal means."

Rafatul Islam Usmani's lawyer declined to comment. None of the other defence lawyers could be reached for comment.

Mr Mulla expects the cases to be heard at a Dubai court soon, but no date has been set. Two of the suspects, Mr Nil and Zia Usmani, have left the country, the document says.

DIB yesterday said it had made impairment provisions of Dh496m ($135m, €106m, £97.8m) related to its exposure to "CCH and related individuals". The bank said it had foreclosed on the Plantation and was pursuing other securities related to this transaction.

Other cases are moving to trial, lawyers say, including alleged financial irregularities at Sama Dubai and Mizin, property developers owned by Dubai Holding.

The Dubai bribery case makes the "Sydney Morning Herald"

From the Sydney Morning Herald
18 February 09

UNTIL his arrest for suspected bribery last month, Matt Joyce was in command of the world's biggest waterfront development, the most audacious project yet in Dubai Inc's high-rise fantasia.
Joyce, the Australian managing director of the state-backed Dubai Waterfront, boasted of its vital statistics in a recent interview. Stretching 30 kilometres, it would cover 14,000 hectares, making it twice the size of Hong Kong Island.

It would dwarf the emirate's famous World and Palms developments. It would reclaim six islands and involve shifting enough sand to fill Wembley Stadium three times every month. And it would become home to 400,000 people within five years.

"We have the luxury of creating this city on a blank canvas," said Joyce, who would oversee the construction of yet another space-age Atlantis rising from the Arabian Gulf.

But Dubai's blank canvas has become murky. Few of the world's property bubbles became as inflated as Dubai's, and few have burst so explosively in the global meltdown.

Joyce, 43, the former Sydney-based chief of the respected property group St Hilliers, was among five senior executives made redundant from Dubai Waterfront last month.

Then, on January 25, he and two Australian colleagues were taken in for questioning as part of a year-long crackdown on fraud and corruption among state-backed property developers and banks. One of the Australians, a 55-year-old man from Brisbane, was released. But Joyce and another Melbourne man, 44, are still being held without charge. Both have families in Dubai.

Last night, Sydney time, the prosecution was in court applying to extend their custody for another 15 to 30 days. Their Australian lawyer, Martin Amad, was there and told the Herald: "No charges have been laid and both men strenuously deny the allegations."

He said they were confident that authorities would soon determine their innocence based on documentation they had supplied. He would not name Joyce's colleague.

The men are among more than 20 executives in jail as part of Dubai's fraud and corruption investigation. All are yet to be charged, but some have spent almost a year behind bars. Dubai police have given no details on whom the Australians allegedly bribed.

Joyce's lawyer in Dubai, Salem Al Sha'ali, had told the Gulf News: "The suspected transaction cannot be considered a bribe. The figure isn't exact and the amount was given back because the deal didn't go through. It's a big misunderstanding."

Mr Amad said the quote, as reported, was inaccurate and he insisted there was no transaction and no deal. "No bribe was paid."

A former work colleague of Joyce's, from Australand in Sydney, described him as "straight and decent".

"If there's anything there, it would be totally out of character," he said.

For the 16 months before his shift to Dubai, in April 2006, Joyce was chief executive at
St Hilliers in Sydney. It is well known in the industry that he parted on unhappy terms, although his termination contract prevents St Hilliers revealing the reasons.

Joyce joined Dubai Waterfront, whose parent company is the government-owned Nakheel. Nakheel is the biggest developer in the United Arab Emirates and has projects worth about $US80 billion ($124 billion).

Asked how the Australians were being treated in jail, Mr Amad said they had no complaint. They were "anxious to be released" but there was slim chance overnight of bail.

Joyce had been made redundant shortly before his arrest. Asked if there were fears that the men were being made scapegoats for the broader corruption inquiry, Mr Amad said he could not comment. "It is not an argument we are putting forward."

Regardless of the case against the Australians, Dubai Inc is on trial in the eyes of the investment world, and the fraud crackdown has signalled the emirate's determination to send a clear message that it is a good place to do business.

Dubai property values are in free-fall. Some forecast they will drop by as much as 50 per cent this year.

Along with thousands of redundancies, local police reported at least 3000 cars abandoned outside Dubai International Airport in the four months to January. Many had keys in the ignition. It seems debt-ridden and jobless foreigners are fleeing Dubai.

Nakheel insists Dubai Waterfront is forging ahead.

Unlike the other emirates, Dubai has little oil to speak of. It has only its real estate, built on the whims of its rich and its rulers. Only on this can it guarantee its future as a global financial hub

The Dubai fraud case reaches the Australian press

From the Sydney Morning Herald, 15th Feb 2009

Australians in Dubai face fraud charges
* Taghred Chandab, Dubai
An Australian man appointed to spearhead the construction of the world's largest coastal development has been arrested in the Middle East after a government investigation into alleged corruption and bribery.

Matt Joyce, 44, and an unnamed 43-year-old Victorian man were taken into custody in Dubai on January 25 and charged with fraud.

The Sun-Herald understands that a third man, from Queensland, was also detained and questioned in relation to bribery allegations but was later released.

A spokesman for Australia's Department of Foreign Affairs and Trade confirmed the men had been charged with fraud.

"We understand both men will apply for bail but it is unknown if it will be granted," he said. "The Consulate-General visited the men last week and is providing them and their families with support."

Joyce joined Nakheel, the government-owned parent company of Dubai Waterfront, and the United Arab Emirates' largest developer with a portfolio estimated to be worth $US80 billion ($122 billion), in April 2006.

He was the chief executive of Sydney-based property developer St Hilliers before moving to Dubai.

He was one of five Dubai Waterfront senior managers who were recently made redundant as a result of the economic downturn and was due to leave the company in April.

The arrest of the Australian men comes after more than 20 executives were detained in the past year for corruption. Many of the senior managers, who worked for government-owned companies, remain in jail without charge.

If the men are found guilty they face a lengthy jail term followed by deportation.

Australians arrested in Dubai fraud probe

Three Australians are reported to have been arrested here as part of an investigation by local authorities into corruption allegations involving state linked companies in Dubai. It is believed the Australians have lived and worked in Dubai. DFAT, the Australian Department of Foreign Affairs and Trade is attempting to confirm that the men are in custody.

Rumours of an impending investigation circulated last year in the expat community and in August '08 the London Financial Times reported that Adel Shirawi, vice-chairman of Istithmar and former chief executive of the home-finance company Tamweel, had been detained on allegations of embezzlement. The newspaper also reported in the same article that authorities in the UAE had started an investigation into "financial irregularities" at the Dubai Islamic Bank and its real estate arm, Deyaar. Meanwhile, Kabir Mulchandani, the chairman of Dynasty Zarooni, was arrested last week on allegations of fraud after investors claimed he defrauded them of more than $100m.

The Financial Times reported that there were indications that Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, "plans to leave no stone unturned" to allow investigators the freedom to build their case. It seems that susequently the fraud investigation has "mutated into an audit of government-wide graft". Rumours last year were circulating that The Boss had given a warning that an investigation at the highest level was coming and those concerned should 'clean up their acts'. Some did, but it appears some didn't.

Investigators are reported to have uncovered a lot of material but whether anything is done about it, or whether its all swept under the carpet, only time will tell.